Industry Report – Auto Parts Manufacturing

Jennifer Nietz - Manager of Operations


September 2013 – The auto parts manufacturing and Tier I manufacturers is an industry we are currently prospecting to for many of our clients. This is a great industry to sell into if you have a product or service that would benefit automotive and you don’t want to deal with the purchasing complexities of the OEMs. For many of our clients who are interested in tapping into the automotive market, this is the way to go.

The industry is expecting an annual growth over the next five years of over 3%. You will see from the graph below that demand from the OEMs for parts is going to remain steady and with the turnaround of the automotive industry this market will remain very stable.

Revenue vs. Employment Growth

An important element to an industries growth is key external drivers.  This industry has very strong, positive influential drivers that confirm our position to sell into this industry.

  • Demand from car manufacturing – as previously mentioned demand is going to continue from automotive manufacturers and higher production rates are expected, therefore increasing demand.
  • World Price of Crude Oil – as the price increases in oil there will be a demand from automakers to build and produce more cost effective vehicles.  This will put pressure on the suppliers to manufacturer products that create these efficiencies and will force suppliers to consider new technologies and development.
  • Consumer Confidence – this plays a huge role in the automotive industry.  Unfortunately over the last several years consumer confidence has been low and car purchases have slowed.  However, this index is expected to increase over the next couple of years assuring demand for new vehicles.

 

Demand from Car and Automobile Manufacturing

What are parts manufacturers buying? What do they need? We are finding success here for the service based sell. Firms that are providing services for engineering and construction are having success as these companies are expanding current operations or finding ways to update internal processes. However there are a variety of other industries that are having success. According to IBISWorld these industries include:

  • Aluminum Manufacturing
  • Inorganic Chemical Manufacturing
  • Paint Manufacturing
  • Screw, Nut & Bolt Manufacturing
  • Textile Mills

COACT is continuously committed to the research on the best industries to target for our clients and year after year this is one of our ‘go to’ industries that we target for our clients due to the success and stability of the industry.

Questions? Please contact Jennifer Nietz at jnietz@teamCOACT.com